Has Oracle stopped making big acquisitions?

Chris Kanaracus |
May 23, 2011

As midyear approaches, Oracle has made only two small acquisitions. This is out of character for a vendor that has made buying other companies a core growth strategy, doing as many as 13 deals each year since 2005, for a total of roughly 70 since then.

As midyear approaches, Oracle has made only two small acquisitions. This is out of character for a vendor that has made buying other companies a core growth strategy, doing as many as 13 deals each year since 2005, for a total of roughly 70 since then.

In February, Oracle picked up some intellectual property assets from privately held Ndevr, maker of software for environmental reporting and analytics, followed by last month's purchase of data quality vendor Datanomic. Sale prices were not disclosed in either instance, suggesting they weren't material to Oracle's bottom line.

Oracle's biggest acquisition in recent years was Sun Microsystems, a $7.4 billion deal that closed in early 2010. Since then, Oracle has been working to shore up Sun's hardware business and started pushing a vision of integrated systems spanning from disks to applications.

While those efforts as well as the long-awaited Fusion Applications launch are likely keeping Oracle officials busy, it seems doubtful the company is through buying vendors.

For one, Oracle CFO Safra Catz referred to former Hewlett-Packard CEO Mark Hurd's experience "operating a $100 billion business" as a reason for bringing him aboard as co-president last year, and it seems unlikely that Oracle intends to get to such scale solely through organic growth.

However, Oracle may also be no longer interested in gaining scale by consolidating ERP (enterprise resource planning) vendors, as it did with high-profile purchases like PeopleSoft, which had previously bought JD Edwards. Some expected Oracle to make a counterbid for vendor Lawson Software in recent months, but original suitor Infor appears to be walking away with the ERP company in a $2 billion transaction.

Instead, Oracle is likely to focus its buying efforts in a few key areas, according to observers.

"Everyone and his brother" is going after technologies related to the open-source Hadoop framework for large-scale data processing, said Forrester Research analyst James Kobielus.

Oracle has probably been working on its own Hadoop capabilities for years, and possible acquisition targets include Datameer, KarmaSphere and Cloudera, which offer a variety of Hadoop tools and services, he said.

Oracle lacks products in a couple of other key areas, namely mobility and social software, said analyst Ray Wang, CEO of Constellation Research.

"There may be a shift in their portfolio [strategy] to pick up those things," he said.

To help its mobile application bona fides, Oracle could take a look at PaaS (platform-as-a-service) vendors such as Joyent or Engine Yard, according to Wang.